EAST FISHKILL, N.Y. -- IBM Corp.'s Microelectronics Division here has scored another major coup in the silicon foundry business, announcing a multi-year alliance with graphics-chip maker Nvidia Corp.
Under the terms, IBM will make Nvidia's next-generation GeForce graphics processor line, based on its 0.13-micron technology. IBM will produce the chips within its new 300-mm fab in East Fishkill, starting in the summer of 2003.
The announcement represents a major change in strategy for Nvidia. For years, the Santa Clara, Calif.-based chip maker has relied on one foundry for its IC production--Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).
A spokesman for Nvidia said the company is moving towards a dual-foundry strategy to minimize risk. Nvidia will continue to use TSMC's foundry services, but now, it will also utilize IBM's fabs as well. "We will use them both," the spokesman said.
The deal follows reports that Nvidia was unhappy with TSMC over poor yields with its 0.13-micron chips. Until recently, TSMC was struggling to ramp up its 0.13-micron process technology--which impacted Broadcom, Nvidia, Qualcomm, Via, and other customers, according to analysts.
Late last year, TSMC claimed it had solved the yield issues with its 0.13-micron technology. Officials from Nvidia downplayed the problems with TSMC. "We enjoy a great relationship with TSMC," the spokesman said.
But still, Nvidia is moving ahead with IBM and its foundry services. "As the world's leading fabless semiconductor company designing sophisticated GPUs, we need partners that can deliver leading edge manufacturing technology and a broad range of products and services," said Jen-Hsun Huang, president and CEO at Nvidia, in a statement. "IBM brings a new model of advanced technology coupled with close customer integration to the chip foundry business," he said.
In fact, IBM is gaining ground in the foundry business--at the expense of its Taiwanese rivals, analysts said. In March of 2002, IBM and Xilinx Inc. announced an agreement under which IBM will manufacture Xilinx' FPGA semiconductor products. IBM plans to manufacture the parts for Xilinx using IBM's most advanced 130- and 90-nm technologies (see March 4, 2002 story ).
In addition to IBM, Xilinx also uses Taiwan's United Microelectronics Corp. (UMC) as a foundry, it was noted.
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